Sunway Lagoon takes full control of Sunway South Quay as EPF sells stake

PETALING JAYA: Sunway Bhd’s subsidiary Sunway Lagoon Sdn Bhd is acquiring the remaining 20% stake in Sunway South Quay Sdn Bhd (SSQ) from the Employees Provident Fund (EPF) for RM210 million, just weeks after buying out Kuwait Finance House (M) Sdn Bhd’s stake.
In a filing with Bursa Malaysia today, the group said Sunway Lagoon has entered into a share sale agreement (SSA) with the EPF for RM136.65 million and the repayment of RM73.35 million towards the settlement of the Musyarakah Capital invested by the pension fund in 2005.
Sunway Lagoon currently holds a 60% stake in SSQ. Earlier, on Oct 10, 2017, Sunway Lagoon entered into a SSA with KFH to acquire KFH’s 20% stake in SSQ for the same sum, which includes a repayment of RM73.35 million in cash on behalf of SSQ, towards the settlement of the Musyarakah Capital invested by KFH in SSQ. The KFH acquisition is expected to be completed on Dec 15, 2017.
SSQ is primarily involved in the development of a 160-acre mixed project called Sunway South Quay, which is located in the integrated township of Sunway City.
Upon completion of both SSAs, Sunway Lagoon’s stake in SSQ will be increased from 60% to 100%, making SSQ a wholly owned subsidiary of Sunway Lagoon.
“With SSQ as a wholly owned subsidiary, SLSB (Sunway Lagoon) will have full ownership of the development (Sunway South Quay, a mixed development in Sunway City) and its developable landbank, and will have control over the timing of future launches and product mix to maximise the benefits to Sunway from the future development of Sunway South Quay.
“The proposed acquisitions will also contribute to the profitability of the group as SSQ is already a profitable on-going concern. The increase in the stake is an affirmation of Sunway’s confidence and commitment to the long term prospects and success of Sunway South Quay,” it said.
The purchase consideration will be funded through bank borrowings and internal funds. The proposed acquisition is expected to be completed on Dec 15, 2017.
Sunway’s share price rose 0.59% or 1 sen to close at RM1.69 today with a total of 5.59 million shares traded, giving it a market capitalisation of RM8.25 billion.